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Despite being a public housing tenant who lives on a disability pension, 73-year-old Gail Innes is now $4000 behind in her rent to a private market property, due to an increasingly criticised state government scheme known as “headleasing”.
Gail and her daughter Laura’s journey into the public housing system began with a series of profound personal and financial losses.
Originally home owners in Melbourne’s inner south, their stability collapsed following the death of Laura’s father by suicide. To secure her children’s future, Gail cashed out her superannuation and sold the family home. By 2012, with no assets left, the pair entered transitional housing before being allocated a long-term unit at the Horace Petty estate in Prahran.
After years of serious targeted violence and trauma at the estate, Laura and Gail were moved to Barack Beacon in Port Melbourne in 2018, where they finally felt safe to build their lives and Laura found employment as a disability support worker.
But in 2022, they joined hundreds of residents who were relocated from their homes as part of the state government’s multibillion-dollar redevelopment program of its dozens of public housing estates. It was then they moved into “headleased” private rentals because Homes Victoria lacks enough government-owned stock to house those displaced by its many public housing demolitions and rebuilds.
Under these arrangements, the state rents from private owners at market cost, and then on-leases the property to public tenants at their usual subsidised rent.
For Gail and Laura, this meant moving into a private home in Albert Park and continuing to pay their public tenancy rent of $1080 a month.
They were told they had a guaranteed right to return to the Port Melbourne estate once it was rebuilt. But four years on, they have fallen through a legal loophole and found themselves effectively kicked out of the state’s public housing system.
Their crisis began when the owner of their Albert Park home decided to sell last year and applied to VCAT to have the contract with Homes Victoria nullified.
As the landlord moved to sell, the department presented Gail and Laura with two alternative housing offers in South Melbourne, which they and their community lawyer say were unacceptable.
The first, a property on Danks Street, was boarded up – confirmed by images supplied to The Age – and allegedly occupied by squatters. The second, on Smith Street, was reportedly infested with “cockroaches, rats, [and] pantry and clothing moths” – also documented in photos obtained by The Age.
More critically for Gail, who has diminishing mobility, the second property had a steep, curved internal staircase. Despite an occupational therapist’s report confirming these physical barriers, the Department of Families, Fairness and Housing (DFFH) denied Gail’s “no internal stairs” medical requirement.
For weeks, the department’s message to the Innes’ was clear: because they had refused the two offers they were no longer the state’s problem. Contemporaneous notes show a departmental official notified the family’s lawyers that they were “no longer public housing residents”.
When the family pleaded for help, a DFFH officer reportedly told them they would be left “homeless and in an enormous amount of debt”, and advised them to call a homelessness hotline.
VCAT eventually granted an order to the landlord to extinguish the contract with Homes Victoria. That order, obtained by The Age, shows that once the state’s headlease was terminated in March, Gail and Laura were automatically converted from public to private renters. Their subsidised rent of $1080 a month instantly jumped to a market rate of $5084.
The landlord’s agent, Belle Property, lashed the government’s actions. In an email, the agent noted the department “cannot leave a tenant it has housed under its scheme in a property they cannot afford, nor fail to rehouse them in a suitable property through DHHS”.
The agent further noted the department had actively sought to “relinquish its obligations” under the lease, effectively offloading a $5000-a-month liability onto low-income tenants, which had left the landlord in financial stress too.
“It’s just messy, and it’s illogical,” said Lloyd Murphy, a community lawyer at Southside Justice representing the pair.
“You’ve now got Laura and Gail, who are public renters, dealing with a private landlord who is trying to evict them, and public housing are not helping any more. To be offered a homelessness hotline, it’s just ridiculous.”
However, after The Age approached Homes Victoria, a spokesperson conceded that Gail’s physical limitations were valid. In a statement, they said – after months of denying her medical needs – they “will only be offered accessible homes”.
Despite Homes Victoria repeatedly privately telling the pair they were no longer public tenants, the department told The Age that Gail and Laura’s right to return to Barack Beacon is “uninterruptible”.
“We understand that this is a distressing time for the two renters, and we are working hard with them to identify a suitable property for them,” the spokesperson said.
The episode raises major concerns about the practice of headleasing, which is becoming more frequent as the state embarks on numerous major redevelopment projects.
While DFFH does not report on how many properties it currently headleases or at what cost, at least 150 properties were handed back to private landlords between 2024 and 2025, according to Homes Victoria’s latest annual report.
Homes Victoria told The Age that 24 households from the public housing towers have been relocated into headleased properties so far and described headleasing as a “vital tool”.
For the Innes family, the department’s about face is some consolation only after their sense of security and trust was already broken. Despite the departments comments, as of this week, they are still facing a formal eviction date in July, and have not been offered a habitable home by the department.
“We don’t want anyone to go through what we have in the last six months,” Gail said.
“What about all these other people that it [might] happen [to],” added Laura. “They’re just going to get blackmailed, like me and Mum nearly did.”
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